How To Spot a Loan Shark and Stay Away From Them – No Guarantor Loans
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How To Spot a Loan Shark and Stay Away From Them

How To Spot a Loan Shark and Stay Away From Them

loan shark

In today’s times, it’s easy to pretend to be someone’s friend and offer money when they most need it. In the UK, there are lots of people and families with a low income and a poor credit score. Obtaining long term loans from banks and building societies becomes difficult for them. That’s when they may fall prey to a lender who is helpful but is a loan shark in disguise. Falling prey to loan sharks is very easy as they seem to be like any other lender. But what you see is often not true.


Who is a Loan Shark?

A shark is a pretty scary fish. No wonder a loan shark uses the same analogy. A loan shark is a dangerous person or body offering loans at a high interest rate. They don’t hold an authorization from the local financial regulator, the Financial Conduct Authority (FCA) in the UK. Gullible and desperate people are the target for a loan shark. Such people are easy to convince as they don’t verify a lender’s credibility. They blindly trust anybody and everybody. This can be very dangerous in this age of fraud and trickery.


What Does the FCA Do?

The Financial Conduct Authority (FCA) is a financial regulatory authority based in the United Kingdom. It came into existence on April 1, 2013 and has its headquarters in London. The FCA does not work with the UK Government. It is an independent body responsible for regulating the conduct of the financial services industry. It regulates financial firms operating out of the country, provides services to customers and maintains the integrity of the financial market.

One of their important functions is taking steps to protect consumers from frauds of a financial nature. Any individual or firm with an objective to provide regulated financial services or credit facility must first apply to the Financial Conduct Authority (FCA) for authorization. Only on getting this certificate from the FCA can they accept deposits and give loans. Unauthorised lenders have to pay fines and can even be face imprisonment.


How To Spot a Loan Shark?

A loan shark has a clever disguise and that makes them tricky to spot. Finding out whether a loan shark is next to impossible in the early stages. But, if you look carefully, there are always some things that look suspicious. We are scared of loan sharks as they are the last people you should deal with, however badly you might need the money. You can follow these tips to beware of loan sharks.

  • If the website of a lender doesn’t have contact details, it means something is fishy. Every lender would have their email ID and telephone number mentioned on their website.
  • An authorized lender always has an FCA Authorisation number displayed on their website. Look for the License number of the firm.
  • If you’re unclear whether the firm is a broker or direct lender, it’s best to avoid them.
  • An important thing to be careful about is the URL of the website. Websites of genuine lenders are secure and have ‘https://’ instead of ‘http://’ in their URL. If it’s an insecure website, the lender may misuse any details you fill online.
  • If you’re a lender or broker approaches you with a loan offer, it’s best not carry on any further dealings with them. No broker or lender would approach you. You go to a lender when you need a loan, not the other way round.
  • Loan sharks offer no paperwork, for example, a credit agreement or record of payments.
  • A fake lender may refuse to give you information about how much you owe and what your interest rate is.
  • You may have to give documents like bank cards, driving license and passports as security for the loan.
  • If you’ve taken money from a loan shark, you may find your debt suddenly increasing. Additional charges, not told earlier, may also add at any time.
  • Even if you’re willing to settle your debt in full, a fake lender may not allow you to do it.
  • As long as you’re keeping up with repayments, all is well. But the moment you miss a payment, you’ll start getting threats. The loan shark may also turn up at your door and resort to violence.

loan shark

How To Check If My Lender is Genuine?

As per the norms of the FCA, every individual or firm offering financial and credit services to UK citizens needs to be authorized by them. The FCA is like a watchdog- monitoring the activities of the financial industry and the companies therein. The FCA keeps a list of all authorized lenders. You can check the FCA Financial Services Register online to see if your lender is genuine or fake. It’s best to do this before contacting a lender as it saves time, money and stress later on. If a particular lender doesn’t appear on the list, that means they aren’t authorized to lend money to the public. Don’t borrow money from them or let them into your house. It can be a risky thing to do.


Why Does a Loan Shark create Fear?

A loan shark is a dangerous individual to deal with. They are just out to fool people and make money out of them. Under the guise of lending money, they subject people to a lot of physical and mental harassment. They may not stick to their loan period and demand money whenever they want it. If you fail to pay, they may take away your jewellery or threaten to report you to the police. Loan sharks often fudge details of your loan repayments so that you end up paying more money than you owe. There have been cases of people resorting to prostitution and drug smuggling to pay the money a loan shark demands.


Loan Sharks and the Law

Loan sharks don’t have any legal authority to either lend or demand money from borrowers. Any lender who harasses you should be afraid of the law. Some loan sharks will tell you that you’ll be sent to prison if you don’t pay back their money. However, this cannot happen as the loan itself is illegally given. They have no legal right to recover the debt by law.


Reporting a Loan Shark

If you or somebody you know is being harassed by a loan shark, help is not far. You can report them to the police. The police will ensure that legal action is taken against them. Find out how to report a loan shark on


Alternative to Loan Sharks

If you have a low income or bad credit score and need urgent money, come to us. Beware of loan sharks! We are an FCA authorised lender and provide bad credit loans without a credit check.


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